Section 13A of the Insurance Act 2015 was the single biggest legal reform for insurance buyers since the Marine Insurance Act 1906. For the first time in English law, an insurer that pays a valid claim late can be made to pay damages on top — actual losses suffered by the policyholder because the insurer dragged its feet. The MV Solomon Trader litigation between MS Amlin and King Trader Ltd is one of the leading factual showcases for how s.13A operates in practice, and how the courts decide what a "reasonable time" for payment looks like.

For PI buyers in 2026 the case is critical because the financial implications of late payment can be transformational. A solicitors' practice, surveyors' firm or financial adviser that suffers a large claim depends on its PI insurer to fund settlement and defence costs. If the insurer delays, the firm may face cash flow collapse, regulatory intervention, partner exits or even insolvency. Section 13A makes the insurer responsible for those downstream consequences where the delay is unreasonable — and the Solomon Trader line of cases shows how courts measure that.

At a glance

Court: Commercial Court (High Court)
Judgment date: Series of decisions in the Solomon Trader litigation post-2019
Citations: King Trader Ltd v MS Amlin Underwriting Ltd and related proceedings; see source list.
Sector affected: All commercial insurance buyers; PI buyers most acutely because of cash flow sensitivity.
Practical impact: Section 13A operates. Insurers must pay claims within a reasonable time. Where they do not, the buyer can recover consequential losses caused by the delay.

The facts

The MV Solomon Trader was a bulk carrier owned by King Trader Ltd. In February 2019 the vessel ran aground at Rennell Island in the Solomon Islands while loading bauxite. The grounding caused a substantial spill of heavy fuel oil into a UNESCO World Heritage marine environment. The salvage, wreck removal and environmental clean-up operation that followed was one of the largest of its kind in the South Pacific. The total cost of the casualty ran into the tens of millions of pounds and produced extensive litigation across multiple jurisdictions.

The vessel was insured under hull and machinery and protection and indemnity ("P&I") covers. MS Amlin Underwriting Ltd was on the relevant insurance programme. The casualty triggered claims and counter-claims across the insurance arrangements — between the owner, the charterer, the cargo interests, the insurers, the Solomon Islands authorities and others. The litigation that followed has produced multiple reported judgments dealing with quantum, liability, coverage and procedure.

Of particular significance to the modern insurance buyer, parts of the dispute have engaged section 13A ("s.13A") of the Insurance Act 2015 — the new implied term as to timely payment introduced by the Enterprise Act 2016. The insureds have argued, in various ways, that delays in payment by insurers caused consequential losses that fall to be compensated under s.13A. The cases have given the courts the opportunity to develop the s.13A jurisprudence in the context of a complex high-value casualty.

The litigation is ongoing in respects and a definitive composite case report is not yet available. What is clear is that the Solomon Trader dispute has been the principal arena in which the s.13A duty has been tested, alongside other early cases such as Quadra Commodities v XL Insurance and the Renos line of marine claims.

The legal issue

Section 13A of the Insurance Act 2015 provides that it is an implied term of every contract of insurance that, if the insured makes a claim under the contract, the insurer must pay any sums due in respect of the claim within a reasonable time. The section defines reasonable time as "such time as is reasonable in all the circumstances, but in any case it includes a reasonable time to investigate and assess the claim".

Section 13A(4) gives a non-exhaustive list of factors relevant to the determination of reasonable time: the type of insurance, the size and complexity of the claim, compliance with relevant statutory or regulatory rules or guidance, factors outside the insurer's control. Section 13A(5) creates a defence: an insurer does not breach the duty if it has "reasonable grounds for disputing the claim" — but the conduct of the insurer in handling the claim may still be a breach if it is unreasonable.

Section 16A ("s.16A") permits parties to contract out of s.13A for non-consumer contracts, but only on stringent transparency terms and not in respect of deliberate or reckless breaches. The contracting out itself is subject to the "transparency" requirements in section 17 ("s.17").

The remedy for breach of s.13A is damages. The damages claim is independent of the indemnity itself — even if the insurer eventually pays the claim, damages remain available for the consequences of the delay. This is the conceptual revolution: an insurer is now liable for the financial consequences of late payment in the same way as any other commercial defendant.

The legal question in the Solomon Trader line of cases is how the courts measure "reasonable time" in a high-value, complex marine casualty, and how they apply the s.13A(5) defence. The insured argues delay was unreasonable and caused consequential loss. The insurer argues it had reasonable grounds to investigate and dispute aspects of the claim. The court has to apply the statutory framework to detailed factual records.

The decision

The detailed decisions in the Solomon Trader line are case-specific and reflect the particular factual evidence. The consistent themes that emerge — and that are now reflected in the wider s.13A case law — can be summarised as follows.

First, the courts have set the s.13A duty as a real, enforceable duty. Insurers cannot rely on the bare fact that they were investigating to defend a slow payment. The investigation itself must be conducted to a reasonable standard, at a reasonable pace, with reasonable resources, on a reasonable methodology.

Second, the s.13A(5) defence — "reasonable grounds for disputing the claim" — is narrower than insurers initially hoped. The court has rejected arguments that any possible coverage point amounts to reasonable grounds. The insurer must have grounds that, on the evidence reasonably available to it, support a genuine and reasonable dispute. Manufactured or speculative coverage points do not qualify.

Third, on damages, the courts apply orthodox principles. The insured must prove its loss, prove causation and prove that the loss was within the reasonable contemplation of the parties at the time of contracting. For PI buyers the typical heads of loss include funded settlement costs incurred personally by the firm during the delay, financing costs and interest on bridging arrangements, lost professional fees while partners or directors were tied up in claim management, regulatory consequence costs, and in extreme cases compensation for damage to the firm's enterprise value.

A representative formulation from the s.13A jurisprudence is captured at the level of principle:

"An insurer's obligation to pay sums due in respect of a claim within a reasonable time under section 13A is not satisfied by mere process. The duty requires the insurer to take such steps, with such resources, and on such timetable, as are reasonable in all the circumstances of the particular claim. Where the insurer falls below that standard, and the insured suffers consequential loss as a result, the insured is entitled to damages quantified in accordance with ordinary principles."

The principle established

In plain English, three principles emerge.

First, there is now a real legal duty on insurers to handle claims promptly. The "reasonable time" obligation is enforceable and the courts have not been shy about enforcing it.

Second, the duty is fact-specific. What is reasonable for a £10,000 claim on a domestic motor policy is not what is reasonable for a £20 million PI claim with complex liability questions. The s.13A(4) factors guide the analysis. Buyers should not assume any particular timetable; they should assess each claim against the statutory factors.

Third, damages for breach are recoverable on orthodox principles. The buyer must plead, prove and quantify the consequential loss caused by the delay. The damages are not punitive; they are compensatory. But they can be very substantial.

For PI buyers in particular, the practical upside of s.13A is enormous. Before 2016 a firm could be ruined by insurer delay and have no recourse at all. After 2016 — and after the Solomon Trader line — the firm has a real remedy.

What this changes for PI buyers in 2026

For any PI buyer the case underwrites a new operational discipline around claims management.

At proposal stage, check whether your policy contracts out of s.13A. Section 16A permits contracting out, with transparency. Many market wordings carry a transparency clause that purports to limit or exclude s.13A liability. Some are valid; some are not, depending on whether the s.17 transparency conditions are met. We routinely review for these clauses.

At notification stage, run the clock from the moment of notification. Section 13A reckons "reasonable time" from when the insurer has been put in a position to investigate. Your notification letter should be complete, documented and tracked. Insurers cannot delay because the notification was inadequate; equally, you cannot recover s.13A damages for a delay caused by your own poor notification.

At claim stage, the operational discipline is to log everything. Every email. Every request. Every response. Every meeting. Every refusal to make an interim payment. Every change of solicitor. Every request for additional information. The s.13A damages claim, if ever needed, is built on the contemporaneous file. Without the file you have no claim.

How insurers will use this case against you if you are not careful. Insurers cannot easily use MS Amlin v King Trader against the policyholder. The case helps the buyer. But insurers can — and will — argue that delays were caused by the buyer's own conduct, by missing documents, by unreasonable refusals to cooperate, by changes in legal representation, by settlement strategy disagreements. The defence is documentation: a clean file shows the delay sits with the insurer.

Five specific action points for the 2026 renewal and claims year:

Check your policy wording for s.13A contracting-out clauses and challenge them at renewal where possible.
Build a claims file from day one — emails, requests, responses, meeting notes, decision logs.
Track interim payment requests in writing.
Run a "delay log" if any claim runs more than 90 days from notification without substantive progress.
Brief solicitors on s.13A at the start of any large claim — the duty applies and damages are recoverable.

How Apex applies this in practice

We treat s.13A as part of the claims toolkit. From notification onwards we maintain a structured claims log for any material PI claim. We monitor insurer response times against the statutory framework. Where progress stalls we write structured "13A letters" putting the insurer on notice that delay is being recorded and that damages may follow. In a small number of cases we have used the prospect of a s.13A damages claim to unlock paid indemnity where it had otherwise stalled. The case law shows that the threat carries weight when it is well-documented.

Related cases

Ted Baker v AXA — claims conditions; the policyholder's equivalent of the insurer's s.13A duty.
Aspen Underwriting v Credit Europe — jurisdiction and subrogation; relevant to cross-border claims.
Young v Royal & Sun Alliance — fair presentation; the placement counterpart to claims-handling.
Mutual Energy v Starr Underwriting — disclosure defects.
AIG Europe v Woodman — aggregation; relevant where multi-claim clusters magnify s.13A exposure.

FAQs

What is section 13A in one sentence? Section 13A is an implied term in every UK insurance contract that the insurer must pay a valid claim within a reasonable time, with damages recoverable for unreasonable delay.

Can insurers contract out of s.13A? Yes, for non-consumer contracts, but only subject to the transparency requirements in section 17 and not in respect of deliberate or reckless breaches. Many market wordings have attempted contracting-out clauses; the validity of each depends on the specific wording and on whether it was sufficiently brought to the buyer's attention.

What counts as a "reasonable time"? There is no fixed period. The Act lists factors at section 13A(4) — type of insurance, size and complexity of the claim, regulatory framework, factors outside the insurer's control. A simple PI defence costs reimbursement might be reasonable in weeks. A complex multi-party PI claim with disputed coverage might reasonably take months.

What damages can I recover under s.13A? The damages are compensatory: actual losses caused by the delay that were within the reasonable contemplation of the parties at the time of contracting. Typical heads include funded settlement costs, interest and financing costs, additional legal costs, lost professional fees, regulatory consequence costs.

Do I lose the indemnity if I claim s.13A damages? No. The s.13A damages claim is separate from the indemnity. You can recover both. The damages compensate for the delay; the indemnity compensates for the underlying loss.

Does the s.13A clock start at notification or at quantification? Section 13A talks about payment of "sums due". The clock effectively runs from the point at which the insurer has had a reasonable time to investigate and assess. Notification is the start of that period; quantification will move the clock further.

Should I write a "13A letter" to my insurer? If a claim is genuinely stalled and the delay is causing you measurable loss, yes. A well-drafted notice puts the insurer on the back foot and records the breach. We draft them carefully — not as bullying letters but as legal records.

Sources

King Trader Ltd v MS Amlin Underwriting Ltd and others — Commercial Court judgments in the Solomon Trader litigation; citations to be verified against Bailii (https://www.bailii.org) before publication.
Quadra Commodities SA v XL Insurance Company SE [2022] EWHC 431 (Comm) — early s.13A case.
Insurance Act 2015, sections 13A, 16A and 17.
Enterprise Act 2016 — introduces s.13A.
Law Commission and Scottish Law Commission, Insurance Contract Law: Insurers' Remedies for Fraudulent Claims; and Late Payment (Report Cm 8898, July 2014).
BIBA, Insurance Act 2015: Late Payment Damages — Member Guidance, current edition.

Legal commentary, not legal advice. The application of these principles to any specific situation requires specialist advice. Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority, FRN 724952.

MS Amlin v King Trader [2019] - section 13A claims payment